The Glamour of Planning

Why does a piece of dyed green linen have the ability to arouse some of our deepest and darkest emotions? While money can bring temporary pleasure, it also has the power to elicit feelings of anxiety, fear and greed. Of course, there is nothing inherently alluring or threatening about bills, shiny coins or the ink printed on a bank statement; rather, it is our relationship with money that determines how we respond to financial opportunities and setbacks.

In my career, I have had occasion to observe people’s relationship with money on a daily basis. A typical client comes into my office in possession of two things: a box containing a lifetime worth of assorted financial documents and the awakened reality that they can no longer delay disciplined financial planning.

After revealing all of the contents of their “box of stuff,” the client inevitably asks, either implicitly or explicitly, “How have I done?”

In a culture that has become conditioned to compete, I am no longer surprised that clients want to discern how their portfolio measures up, but rather than answer directly, I prefer to pose a question of my own.

With their box of stuff sitting on the desk between us, I ask new clients, “What is the most important piece of your financial puzzle?”

Anyone who has made a puzzle before knows that the most efficient method is to start with the corner pieces in order to build a frame for the image. A sound financial strategy must have corner pieces as well, but for most baby boomers nearing retirement, the past thirty or so years of life has made them more of a collector of financial products than a disciplined investor. Decades of opening IRAs with golf buddies and buying insurance from relatives that have long since changed careers has left them with a box full of pieces but no strategy for making them fit together.

When making a puzzle, even more important than the frame is the cover of the puzzle box. The picture on the cover serves as an invaluable reference that can guide the entire building process. Without a vision in mind of what you are trying to construct, the outcome will not be revealed until the work is finished. While some people like surprises when making puzzles, waiting to see how the pieces come together is not a wise strategy for wealth management.

Nearly all of the insecurity that plagues our financial lives stems from the fact that we do not know for what, when, or whom any of our pieces are intended. Instead of gauging progress against defined goals, we have become accustomed to using others as a measuring stick, regardless of how inadequate such a comparative ranking turns out to be.

As many of you know, I recently completed my annual Ironman triathlon. I do not call the event a race because I finished in the bottom 25% of the field and yet accomplished exactly what I set out to do. I arrived at the finish line within seven minutes of the time I told my wife to expect me despite a multitude of obstacles I had to overcome just to finish the event.

I am passionately committed to my family and my planning practice, so making time to train just to finish an Ironman is a challenge.  Winning was never a realistic goal because I was unwilling to divert the required attention away from other life priorities like my daughter, my wife, and my clients.  My goal was to train to finish without requiring treatment in the medical tent to get home, and I did just that.

My plan on the bike was to maintain a stable 140 heart rate and to eat and drink constantly in preparation for the run. Were there times on the course that I wanted to pick up my cycling pace because a twenty something year old passed me like I was standing still? Absolutely, but I knew that doing so would jeopardize my ability to finish the run, so I refocused on implementing my strategy and achieving the realistic goal I had already developed for myself.

Having a plan in place for what I wanted to accomplish provided me with a much needed reference point that I could turn to when my emotions attempted to take over. This is precisely why having a sound financial plan in place is so important.  Much like training, financial planning is done ahead of key events. This ensures that when our ego tries to convince us to pick up thepace, we know just how to respond.

Disciplined planning may not be glamorous, but it is an effective way to approach nearly all challenges in life. Anyone can invest money and hope for a positive outcome. The role of a financial planner is to make sure that your “box of stuff” has a clear picture on the top and that all of the pieces inside fit together to build the puzzle of your dreams. A financial planner’s job is to insist on the importance of the plan. The plan’s job is to protect the investor from becoming his own worst enemy.

Your trusted guide and friend,

Brad F Fortier, CFP®

Certified Estate Planner™
President, Fortier Financial

Recipient of the 2010 Charlie Eisenmann Client First Award